It’s a ‘job killer’. ‘Obamacare will cause the loss of 2 million jobs!’ Dramatic headlines get eyeballs, of course, but there’s a couple of things at play here about the CBO report on Obamacare. One that isn’t true at all (massive job loss for 2 million people) and the other, well, that’s going to have a potentially negative effect anyways.
According to the Washington Post WONKBLOG, “the health-care law will reduce full-time employment, in 2024, by 2 million people.”
As Politico puts it, that’s “nearly three times as high as the budget office’s previous prediction, and it’s supposed to rise in later years to the equivalent of 2.5 million jobs in 2024.”
So is Obamacare killing 2 million jobs?!
Nope, says Washington Post’s Fact Checker. It doesn’t do that. But it does something else.
Here’s the thing, job demand remains the same but workers now have a choice to work less or stop, thanks to government subsidies. Jason Furman, chairman of the Council of Economic Advisors is all about that word “choice” in the Q&A below, but which choice is that? Sure, it potentially reduces ‘job lock’ and gives people the chance to pursue an entrepreneurial spirit. Sounds good… but will workers do that?
Once workers break a certain income bracket, they no longer have access to government subsidies. So here’s the choice workers potentially face: ‘Do I work more to get more money or do I work less so I can keep my subsidy?’
In other words: ‘Which option will give me the most benefit without making me work harder?’
“…at a certain point, a person has to choose between earning more money or continuing to get the maximum help with health insurance payments. In other words, people might work longer and harder, but actually earn no more, or earn even less, money. That is a disincentive to work. “ (Washington Post’s Fact Checker)
That’s potentially 2 million working less, predicts the CBO Report. Working less. Does that sound like people pursuing better options in the workplace? Sure, it’s possible that they find a higher paying part-time job, but if they still want that subsidy, they won’t. Yes, they’re certainly not ‘worse off,’ but that’s because someone is still paying for them.
In this respect, from the way the CBO report on Obamacare phrases it, Obamacare isn’t a ‘job killer’ in the true sense. (Not that I ruling out the other ways it’ll affect the job market.) It’s just creating a paid government incentive for potentially 2 million people to work less or not at all. I’m all for working smart, working less, but not on someone else’s dollar.
What are your thoughts? Are you seeing the same problems here? Kick up the discussion by commenting below or by sharing this on Facebook.
WATCH: Jason Furman Ignore the Real Question About the CBO Report
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